Is it surprising that a macroeconomic model of this type is surprised by large scale convulsions in the economy? The combination of a pandemic and rapidly dete

Is it surprising that a macroeconomic model of this type is surprised by large scale convulsions in the economy? The combination of a pandemic and rapidly deteriorating geopolitics is a compound external shock that does not exist in its training data set (The last energy crisis occurred almost half a century ago). How do large dislocations affect a model of such complexity is hard to say. Take e.g. the formation of expectations: > A distinctive feature of FRB/US is its ability to switch between alternative assumptions about how economic agents form expectations. Under the VAR-based option, expectations are derived from the average historical dynamics of the economy as manifested in the predictions of estimated VAR models. Under model-consistent (MC), agents are assumed to form accurate expectations of future outcomes as generated by simulations of FRB/US itself. Neither option rings particularly well adapted.